Magellan enters definitive merger agreement with Tellurian

Magellan Petroleum Corp. has announced that it has entered into a definitive merger agreement with Tellurian Investments. Tellurian Investments is led by the former founder, Chairman and CEO of Cheniere Energy Inc., Charif Souki, and the former COO of BG Group plc, Martin Houston. Tellurian focuses on the development of a mid scale LNG facility on the US Gulf Coast. Both companies’ board of directors have unanimously approved the terms of the agreement, and recommended that their shareholders approve the transaction. Its completion is still subject to particular regulatory approvals and customary conditions, as well as approval from Magellan and Tellurian shareholders.

The President and CEO of Magellan, J. Thomas Wilson, said: “This transaction concludes our strategic alternatives review process and we believe offers a unique opportunity for Magellan's shareholders to participate at an early stage in an investment potentially similar to Cheniere Energy's remarkable success, under the leadership of Charif Souki. He and Martin Houston are proven leaders in the LNG industry."

Houston said: “Our experienced team leading Driftwood LNG, a 26 million t liquefaction project in Louisiana, and our deep relationship with Bechtel and its sub-contractors, GE and Chart Industries, are key factors that we believe will drive the successful development of one of the most cost-competitive LNG projects globally. With this transaction, we will be able to access more attractive financing in order to develop Driftwood LNG, which should come on stream in 2022, just as the markets for new LNG open up."

The transaction is expected to close in 4Q16. Once closed, pursuant to the terms of the agreement, each share of Tellurian will be converted into the right to receive 1.30 shares of Magellan. Magellan will issue approximately 122 million shares of common stock to Tellurian shareholders, representing approximately 95% of Magellan’s pro forma outstanding common stock.